I'm not sure if this will help, but I had the "AVI files no longer work" problem. I had upgraded to Lion on launch day, & 1.2.2 seemed to work fine. When the 1.2.3 "autoupdate announcement" appeared, I updated. That evening, I discovered that my divx avi files would no longer start.

I did the recommended "get rid of old codecs" thing - in my case, I got rid of divx for mac & flip4mac. I uninstalled & reinstalled Perian from the control panel & restarted. Quicktime still would not play my avi files. I then uninstalled AND deleted the perian control panel.

At this point, I associated avi files with VLC player (so my wife could view the files in question, & I didn't have to keep getting "the look"). That worked fine, but it still bugged me.

Later that evening, I re-downloaded Perian & installed it. I re-associated avi files via the get info window "Perian - Open in QT player" - AND EVERYTHING WORKED again! Happiness!

Before this release, Perian has been rock-solid for me, no matter what type of file I tried to throw at it, & I really appreciate the work that has gone into it.

I have been having the same problem with avi. files as well. My avi. files open in quicktime like normal but when I go to play them they instantly go to pause. I have used Perian for a while with no problems untill upgrading to lion and update 1.2.3. I have done everything you have listed above with no luck, I'm just hoping this is addressed in the next update. I guess I will VLC player until then.

I had the same problem. I couldn't find any of my .avi files that would play. When opening them in Quicktime Player X, they would load and after clicking play it would just switch to pause and never play. Opening them in Quicktime Player 7 worked fine. I tried removing and re-installing 1.2.3, but always got the same problems. I re-installed a copy of 1.2.2 and everything works fine. This must be a problem with 1.2.3, I get the same problem on my iMac and mac mini, switching back to 1.2.2 seemed to make everything work again.

Terminal starts in your home folder, so use the "cd" command to navigate to the directory where your avi file is. E.g: "cd Downloads" (without the apostrophes ofcourse).Once you're in the correct directory, use the following command: "dd if=xxx.avi of=xxx-sample.avi bs=1024 count=10000"Replace the xxx with the correct filename. This should give you a 10MB sample file.